General Information and News Monitoring

Farmers warn over BEE codes

Groups call for caution over aspects of amendments

The Witness
16 Jan 2018
EDWARD WEST

SANDY LA MARQUE KwaZuluNatal Agricultural Union CEO “We believe there should be caution and flexibility with regard to compliance. The Agri BEE sector codes are not compulsory, but mandatory for any farming enterprise that wants to do business with government.”

COMMERCIAL farmers are concerned about aspects of the amendments made to the agriculture sector empowerment codes, in December.

The aim of the amendments is to stimulate greater participation by blacks in commercial farming.

The BEE codes include that owners of land, with enterprise turnover of more than R10 million per year, should transfer at least 30% of productive agricultural land to black people.

There are about 39 000 white commercial farmers and some 5 000 black farmers in the country.

The amended BEE targets are for farming enterprises that do business with the government. Farms with less than R10 million turnover per year are exempt from the ownership element of the amended empowerment codes.

There is an increase in the BEE target for supplier development to three percent of net profit after tax.

There is greater focus on initiatives that result in new ventures, job creation, beneficiation of primary products, support for land reform projects, and support for localisation of goods and services, compared with the previous codes.

KwaZuluNatal Agricultural Union CEO Sandy la Marque said yesterday while they recognise the importance of BEE, “we believe there should be caution and flexibility with regard to compliance”.

The Agri BEE sector codes are not compulsory, but mandatory for any farming enterprise that wants to do business with government.

She said the codes will also bring certainty as to what is regarded from the agricultural sector, in terms of transformation.

She said the ownership, enterprise supplier development and skills development elements of the codes were of concern, as farming enterprises are often run as family enterprises, and not as corporate systems, and so to comply with the ownership criteria “would be almost impossible”.

She said farming enterprises also already face enormous challenges such as drought, safety and security threats and livestock and product theft and financial difficulties.

She said accredited verification agents would engage with farmers on an accreditation process.

Agri SA said in a statement it also foresaw challenges for the requirement that farming enterprises with turnover of more than R50 million, which operate in more than one province, must only use national demographic representation in terms of management control.

Agri SA said this was discriminatory and may be impractical to implement.